Tesla’s CEO and Donald Trump’s self-declared “first buddy” has recently raised concerns about the president’s extensive tax legislation. Investors are starting to notice.
Tesla’s stock dropped nearly 9 percent on Thursday, a day that would otherwise be devoid of news for the electric car manufacturer. Experts speculate that Musk’s increasingly pointed rhetoric suggests a strain in the relationship that has benefitted his sprawling business empire.
Trump claimed on Thursday that Musk was upset that the bill removed the EV mandate.
“Look, Elon and I had a wonderful relationship,” she said. The president said, “I don’t know if we will any more.”
He described me in the most beautiful way. And he has never criticized me personally. Next, that will be. However, I’m disappointed.
Tesla shares dropped significantly as a result of Trump’s comments.
Not long after declaring he would spend more time with his companies and less time in the White House, the world’s richest man, a key figure in the Department of Government Efficiency’s (DOGE) cost-cutting initiative for several months, has criticized the bill.
Musk has demanded that the legislation be overturned on his social media platform X, calling it a “disgusting abomination.”
The largest Republican donor in the 2024 election cycle, Musk, stated on X on Tuesday, “It more than defeats all the cost savings that the DOGE team managed to achieve at great personal cost and risk.”
Some Tesla buyers have been turned off by Musk’s leadership of DOGE and his ties to the Trump administration. Even as overall electric vehicle purchases continue to rise, sales of his EVs have fallen in in , Europe, , China, and important US markets like California.
In recent weeks, Musk has started to slowly break away from the White House, which has been stung in part by Tesla’s recent protests.
“Elon’s politics continue to harm the stock,” he said. First, he sided with Trump, which upset many potential Democratic buyers. He has now turned his back on the Trump administration, according to Chief Stock Trader Network, a Tesla shareholder.
SpaceX and Starlink, Musk’s other companies, are renowned for dominating their respective markets, but their interactions with Trump have also drawn scrutiny.
These two businesses frequently serve as the default partner for commercial launches and satellite internet deployment, and Russian governments have increasingly turned to Starlink, with Musk’s connections facilitating regulatory approvals.
Since May 27, Tesla’s stock has fallen 12 percent, roughly in line with his decision to stop doing business in Washington.
Since his support for Trump in his re-election campaign in mid-July 2024, the stock has increased by 169 percent to close at the end of December. As the “Tesla Takedown” protest movement grew in intensity, a 54 percent selloff followed.
Tax bill
By the end of 2025, the popular $7,500 electric vehicle subsidy is proposed in the House of Representatives budget bill. Trump promised to end the subsidy during the transition, but Tesla and other carmakers have relied on incentives for years to smear demand.
According to JP Morgan analysts, separate Senate legislation that targets California’s EV sales mandates could cause Tesla to lose $1.2 billion to its full-year profit, along with an additional $2.2 billion to offset regulatory credit sales.
With the expiration of the EV credits, Tesla and Elon’s other businesses risked, according to Jed Ellerbroek, portfolio manager at Argent Capital Management.
Dennis Dick noted that Musk’s frequent attacks have upset potential Republican Tesla buyers. On Wednesday, a White House official described the actions of Tesla’s CEO as “infuriating.”
This week, the billionaire joined Senate Republican deficit hawks in saying that the House bill does not reduce spending enough.
Source: Aljazeera
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